The Medici created a lucrative partnership with another medieval
power, the Catholic Church. In what had to be one of the most ingenious
enterprises of all time, the Medici bank collected 10% of your
earnings for the Church. If you couldn't pay, you faced excommunication
- a one-way ticket to hell.

The Pope himself had a massive overdraft, and the Medici bank became the most profitable business in Europe. By 1434, half
the bank's revenue came from the Rome “branch”, which was in fact little more than a mobile bank that followed
the Pope around the world.

Papal connections gave the Medici bank immense power, soon everyone wanted an account with the Pope's personal bank.
On one occasion the nomination of a new bishop was “delayed”, until his father - a Cardinal - had repaid their
debts to the Medici bank.

And the Medici kept ahead of their banking rivals because of the invention of limited liability. Giovanni di Bicci had set up a
franchise system, where regional branch managers shared a stake in the business. Giovanni also banned loans to princes and kings,
who were notoriously bad investments.

Consequentially, the Medici business remained in the black while its competitors lost fortunes.